2004 Robert Milligan

NIADA's National Quality Dealer Award Winner Is Not Above Taking Risks To Make His Neighborhood, His Dealership, And His Industry A Better Place

There's not much that scares Robert Milligan.

Whether it's opening his own buy-here, pay-here lot, asking his father to use his life's savings to bail out his fledgling business, adopting three special-needs children, or rallying fellow car dealers against a dangerous class-action lawsuit, the 44-year-old Milligan is a fearless risk taker who believes that hard work can overcome any challenge.

Just don't ask him to split wood. Milligan and his father spent so many countless hours splitting logs and selling and stacking the wood just to pay the bills during the first year of his dealership that Milligan might rather you burn down his house than ask him for firewood.

2004
NATIONAL QUALITY DEALER
OF THE YEAR

Robert Milligan
of Dallas, TX

"I don't even want a wood-burning fireplace in my house," Milligan says with a smile.

His perseverance and boundless energy has not only allowed him to build a company that sold more than 1,000 vehicles last year, but also take active leadership roles in the used car industry, numerous charities and economic development in the impoverished area of southeast Dallas where his dealerships are located. It is for all those many accomplishments that Milligan was named NIADA's National Quality Dealer for 2004 at the 58 th NIADA Annual Convention & Expo in Dallas this past June.

Being completely unprepared to give an acceptance was one of the few things that scared him.

"My heart was pounding and I tried to scribble some thoughts on a napkin before I had to go up there," he says. "It's a great honor, but I was completely surprised."

CAREER OF CONTRIBUTIONS

Perhaps Milligan shouldn't have been too surprised since he has been honored many times for his contributions to different groups and associations. One contribution, however, may have set Milligan apart from the other dealers vying for the national Quality Dealer of the Year Award. And it is a contribution that many of those same dealers could owe him gratitude.

In 2001, 126 owners of buy-here, pay-here car lots in Texas were named as defendants in a lawsuit that charged them with improperly including deferred sales tax payments in customer finance charges. The attorneys for the plaintiffs were setting the stage to create a class-action lawsuit that potentially could have included every used car dealer in the state, which in turn could have led to a national case involving the entire industry.

"It was one of the biggest things we've had working around here in a long time," says Jackie Gill , executive director of the Texas IADA. "It could have put a lot of dealers out of business."

Milligan was among the first Texas IADA leaders to recognize the danger in the lawsuit and quickly sprang to action to challenge the suit before the stakes got any bigger. He created and co-chaired the Texas Dealer Defense Task Force. The task force hopscotched across Texas , meeting with other independent dealers in effort to educate them on the issue and raise money to fight the lawsuit. Recently, the lawsuit officially was denied class action status and all the dealers were released from the action.

"For months that's nearly all we did," Milligan says. "We raised about $1.5 million in eight months and hired the best class-action defense attorneys. But it wasn't a hard sell with the other dealers.. It was an easy sell. They (the plaintiffs) didn't believe we would have this kind of unity and that we would fight like this. I think they thought we would settle, but they misunderstood our willingness to take risks...but that's all we do. Every minute of every day. Every deal we do is risk."

COMMON RISK

Risk is a recurring theme with Milligan. He is absolutely unafraid of risking his time or money or even his family stability if the reward is big enough or important enough. In many ways, he is the quintessential entrepreneur.

Milligan has become a leading advocate for economic re-development in the southeast section of Dallas where his business located and is active in chamber of commerce for the low-income area. Frustrated by repeated failures to attract any kind of recreation or entertainment venues to the low-income area, Milligan decided to take on the challenge himself. He and his family recently turned a closed bowling alley into a state-of-the-art roller skating rink. The What's Hot Fun Center was a $2 million project that features rows of television screens, a sophisticated computerized lighting system, a playroom for younger children, scores of video games and a large snack bar.

"Kids down here haven't had any place to go for a long time," says Milligan, who doesn't even live in the area, "so we decided to do it ourselves. It's taken awhile, but everyone feels safe coming here. At first, parents would bring their kids and then hang around. Now, we see parents bringing kids and just dropping them off and the kids are entertained for hours."

Such risk-taking extends to his personal life also. For many years, Milligan and his wife Theresa served a foster parents through the Texas Baptist Home. At one point, the Milligans, who have a 17-year-old son, were taking care of six foster children at once, some of whom were severely troubled. The Milligans since have adopted three siblings - Kristian, 4, Victoria , 5, and Alexis 7, - who had suffered years of neglect while living with different families and relatives.

Milligan credits Theresa, a registered nurse, for having an unlimited amount of compassion.

"It's not me. It's her," he says. "She would give everything we own if she thought it would help someone."

Milligan isn't sure where he learned his tolerance for risk. It wasn't from his father James, whom he described as "very conservative." In fact, Milligan wonders if it wasn't watching his dad play it safe with his career that turned him in the other direction. James Milligan worked for 27 years for Woolco, mostly serving as a turn-around specialist, hopping from store to store across the country. The Canadian company abruptly closed all the stores in 1983, leaving James unemployed.

"My dad was kind of living the America dream," Milligan says. "Go to work every day. Earn a small salary. Come home to your family. And then he heard on the radio that he was unemployed. That was pretty traumatic."

While Milligan may be more aggressive than his father, he credits his dad with teaching him a strong work ethic.

"He always said that we weren't blessed with brains so we had to work harder," Milligan says. "Work is the answer to it all. He told me: ‘All you got is your word and your back. And if you tell someone you're going to do something, you do it."

The elder Milligan then purchased a White's Home and Auto Store, which was primarily an auto parts and service store which Robert helped manage. White's moved the Milligans to Dallas when that company also suddenly shut down. Fortunately for the Milligans, they were paid their entire salaries which left them with a small nest egg.

A NEW START

The 25-year-old Milligan was left casting about for a career.

"I had some friends working for a car dealership and they said ‘Why don't try selling cars. You like to talk a lot.,' so I did," Milligan says. He went to work for a Ford dealership and it wasn't long before he and a co-worker began to plot opening their own used car lot. Using his small nest egg, Milligan leased 600-square-feet on South Buckner Boulevard , a stretch of busy road with dozens of used car lots, and a bought a dozen vehicles.

His former co-worker never joined him.

Milligan soon was left scratching his head after every one of the high-mileage cars sold for $500 down and he had no other income while he waited for the monthly payments to begin rolling in.

"It became pretty clear that I hadn't thought this all the way through," Milligan says, recalling his dismay at looking out at his empty car lot. "I wasn't smart enough to know how stupid I was. I had sold all the cars, but that had just basically turned my $20,000 into $6,000 of down payments and that didn't last very long. I almost financed myself right out of the car business, so I had to call my Dad and he brought in his nest egg of about $30,000, which was a very, very major investment for him and we did the same thing. It was pretty bleak looking."

Not knowing what else to do, he and his father bought more cars and then quickly sold them, simply hoping they could hold on until the monthly payments started coming. With the Christmas holidays soon approaching, they bought Christmas trees on credit and sold them from the car lot. When those were gone, they noticed that construction companies clearing land were paying to dump felled trees so the Milligan offered the back acres of the lot to anyone needing to dump the trees. That's when they began splitting and cutting wood to sell as firewood.

The Milligans scraped together a living, gradually expanding the lot with a 500-square-foot repair shop, and then buying property next door so that PBR Cars covered a full city block.

The lot was prospering, but not enough to support to two families so Milligan went to work for new car dealership as a buy-here, pay-here manager. He soon went to work for a loan purchasing company and purchased some $50 million worth of notes, learning the nuances of the business.

In 1997, Milligan returned full time to the family's car lot and for the next three years, PBR grew at a compound rate of 30 percent, selling 150 to 200 cars a month.

"For a long time we used to think if we could just get to 80 notes then we would really be making it big," Milligan says. "Now we're carrying 1,000 and I think we really need to get to 1,500."

Milligan's dealerships deal strictly in high mileage, low cost vehicles. Most of his customers, he says, are at the end of the line.

"It's usually us or walk," Milligan says. "We don't really use credit as a criteria. We know they all have bad credit. We just want references. We want to know how close to the truth are they telling us. We try to verify their residence and employment and if we think we can find them, we'll sell them a car.

"Probably 90 to 95 percent of people intend on paying for their car on time, but almost none do. What changes, we don't know."

He has sold more than 5,000 cars over the years and he knows it is a fine line between collecting and repossessing.

PERSONAL PHILOSOPHIES

"When you start out it's like a teeter-totter," Milligan says, holding a red Sharpie pen between his thumb and forefinger to illustrate. "It's an even balance. You have their down payment and they have your car. But then they miss a payment and the teeter-totter starts to lean and it's not level. We try not to let it lean to far because if they got to far behind, it's not their car anymore. We'll work with them just about any way we can, because once it's tipped, once they don't feel like it's their car, it's over. They'll promise you anything. They'll hide from you. It doesn't matter how much they've already paid you, they just think they can save money to buy their next car. We try to keep it so they can see a light at the end of the tunnel because if we don't, it's over."

As an example, Milligan turns to his computer and quickly pulls up the account of a customer. Screen after screen shows the woman's history of chronically late payments, and then skipping some. Twice Milligan reworks her deal so that he won't lose her as a customer until she finally pays off the $5,000 balance. Not only did he not give up on her and repossess the car, he sold her family another and one to her brother-in-law.

Milligan says he knows it would be easier to invest, say, $15,000 in one car and sell it to a buyer with good credit, but he simply prefers buying eight or 10 cars for the same $15,000 and have the chance to make 10 times the profit.

"It's all about the multiples of math," Milligans says. "It's a high-risk, high-yield business."

It's working well for Milligans. Along with the three dealerships, he owns a retail shopping center where he rents space to a paint and body shop, oil change facility, transmission repair shop and an auto stereo center. Located next door to his main dealership, the businesses ensure his customers have access to quick service.

Milligan is active in the Dallas County Automobile Dealers Association, serving as a vice president, and is long-time member of the Texas IADA, and NIADA. Milligan says one of the industry's biggest problems is the negative reputation used car dealers have with the general public. Improving that reputation can be done, he says.

"Get involved in the community," Milligan says. "Most used car dealers are pretty decent guys. If somehow we get involved in our local communities then people can see that we're honest, hard-working businessmen."